§ 6603 — Incorporation of co-operative property/casualty insurance companies

§ 6603. Incorporation of co-operative property/casualty insurance\ncompanies. (a) A corporation may be organized and licensed as an advance\npremium corporation or as an assessment corporation in the manner\nprescribed in this section and subject to any other applicable\nrequirements of this chapter. The successive steps shall be as follows:\n (1) The proposed incorporators, who shall be natural persons not less\nthan thirty in number, shall submit to the superintendent in writing,\nthe proposed name of the corporation, which shall include the word\n"co-operative," and the county in which its principal office will be\nlocated, and the name and address of a public newspaper of general\ncirculation in said county. Such proposed incorporators shall also\nsubmit at the same time statements subscribed and affirmed by them as\ntrue under the penalties of perjury, in such form as the superintendent\nmay require, which shall show that each incorporator is the true and\nbona fide owner of improved real property worth not less than two\nthousand dollars; that the real property so owned by such incorporators\nis worth in the aggregate not less than two hundred thousand dollars;\nand that such real property is located wholly within the territory\nwherein the corporation desires to do business.\n (2) If the superintendent approves the proposed name of the\ncorporation and the designated newspaper, each as conforming to the\nrequirements of law, and if he finds that the affidavits required by\nparagraph one hereof are sufficient in form and substance, he shall\nnotify the proposed incorporators, or their representative, in writing.\nSuch approval shall become void if within six months from the date\nthereof the declaration and charter have not been filed pursuant to this\nsection. However, upon application made prior to the expiration of such\nsix months, the superintendent for good cause shown in such application\nmay extend such approval for an additional period not to exceed six\nmonths.\n (3) The proposed incorporators shall cause to be published in the\napproved newspaper, twice a week for three successive weeks, or once a\nweek for six successive weeks, a notice of intention to form such a\ncorporation, stating its proposed name, the kind or kinds of insurance\nbusiness to be transacted and whether on the advance premium plan or\nassessment plan, the names and respective residence addresses of the\nproposed incorporators, and the location of its principal office in this\nstate.\n (4) The proposed incorporators shall submit to the superintendent\nproof of such publication by the statement of the publisher or of his\nforeman or clerk, subscribed and affirmed by him as true subject to the\npenalties of perjury, and a declaration subscribed and affirmed as true\nunder the penalties of perjury by each and all of the incorporators,\nsetting forth the items hereinafter specified.\n (5) Such declaration shall be in the English language, and shall state\nthe intention of the proposed incorporators to form a corporation for\nthe purpose of doing one or more kinds of insurance business specified\nin subsection (a) of section one thousand one hundred thirteen of this\nchapter and shall specify the provision or provisions of such section\ndefining the kind or kinds of insurance business, insofar as such kinds\nof insurance are specifically available to such a corporation by section\nsix thousand six hundred four or six thousand six hundred five of this\narticle, whichever is applicable. Such declaration shall also set forth\na copy of the proposed charter of the corporation, which shall contain:\n (A) The name of the proposed corporation.\n (B) The territory in this state wherein the corporation desires to do\nbusiness.\n (C) The kind or kinds of insurance to be transacted, specified as\nabove required, and whether on the advance premium or assessment plan.\n (D) The mode and manner in which its corporate powers are to be\nexercised.\n (E) The number of its directors, which shall be not less than seven,\nand a provision that in no case shall the number of directors be less\nthan seven.\n (F) The times and manner of electing its directors and officers, the\nmanner of filling vacancies in such offices, and a provision that at all\ntimes a majority of the directors shall be citizens and residents of\nthis state and that not less than one shall be a resident within the\nterritory in which the corporation is licensed to do business.\n (G) The names and the residence addresses of the directors who shall\nserve until the first annual meeting of the members of the corporation.\n (H) Such other particulars as may be necessary to explain the objects,\npurposes, management and control of the corporation. The superintendent\nmay by regulation prescribe the additional information to be required,\npursuant to this subparagraph.\n (6) The superintendent shall transmit such proof of publication,\ndeclaration, and charter to the attorney general. If the same be\napproved by the attorney general, as conforming to the requirements of\nlaw, upon receipt of such approval the superintendent shall file such\ndeclaration, charter and proof of publication in his office, and shall\nissue a certified copy thereof to the incorporators. If requested by\nsuch incorporators, the superintendent shall also issue to them a\ncertificate of incorporation executed by him in the name of the people\nof the state. Such incorporators shall thereupon become a body corporate\nand shall then have the powers enumerated in paragraph seven hereof, but\nsuch corporation shall not be authorized to do the business of insurance\nuntil it shall have obtained a license therefor.\n (7) (A) Such a corporation shall have power to receive such monies as\nare necessary to comply with the requirements of this article relative\nto the initial surplus fund of such corporation and to borrow monies in\naccordance with section one thousand three hundred seven of this\nchapter.\n (B) Any such corporation shall have power to open books to receive\napplications for insurance in such corporation from persons desiring and\neligible to become members thereof, and to keep them open until the\nminimum number and amount of such applications, together with the\npremium payments or advance payments thereon as required by section six\nthousand six hundred four or six thousand six hundred five of this\narticle, whichever is applicable, have been received; to invest the\nmonies so received in the manner prescribed in section one thousand four\nhundred two of this chapter; and to expend money or incur liabilities\nnecessary or proper as organization expenses, such expenses not to\nexceed the maximum amount prescribed in the permit hereinafter\nmentioned.\n (C) No such corporation shall solicit applications for insurance or\nreceive premium payments thereon or advance payments, as the case may\nbe, until it has received a permit therefor from the superintendent.\n (D) Such permit shall be issued after:\n (i) the superintendent is satisfied, by such evidence as he may\nrequire or by such examination as he may deem expedient, that the\ncorporation holds in trust for prospective policyholders and creditors a\nfund, in cash or securities eligible for investment under section one\nthousand four hundred two of this chapter, at least equal to the amount\nrequired of such a corporation as its cash organization or initial\nsurplus fund, such trust to terminate if and when a license to do an\ninsurance business of the kind or kinds provided in its corporate\ncharter has been obtained; and\n (ii) the corporation shall have submitted to the superintendent an\nestimate of the total amount to be expended for organization expenses,\nand the superintendent shall have approved the same. Such estimate shall\nbe recited in the permit, which shall also fix the maximum amount, to be\nprescribed by the superintendent, which may be expended for organization\nexpenses.\n (E) The directors and incorporators of any co-operative\nproperty/casualty insurance company shall be jointly and severally\nliable for all debts or liabilities of such corporation until it shall\nhave been licensed to do an insurance business of the kind or kinds\nproposed.\n (8) (A) Before licensing any such corporation to do any insurance\nbusiness, the superintendent shall require proof, by statements of at\nleast three incorporators subscribed and affirmed by such incorporators\nas true under the penalties of perjury and by such investigation or\nexamination of the affairs of such corporation as he may deem it\nexpedient to make pursuant to article three of this chapter, that:\n (i) the corporation has fully complied with this chapter applicable to\nsuch corporations;\n (ii) that it has the required cash organization or initial surplus\nfund in cash or in investments as prescribed in this chapter;\n (iii) that it has the required number and amount of bona fide\napplications for insurance;\n (iv) that the membership list is genuine; and\n (v) that every member has paid in cash the required amount of premium\nor advance payment, as the case may be, on the insurance applied for and\nwill take the contracts as agreed within sixty days after a license has\nbeen issued to such corporation.\n (B) If the superintendent finds the proof of the facts itemized in\nsubparagraph (A) hereof to be sufficient, he shall file the same in his\noffice and notify the corporation thereof.\n (C) Upon payment of the appropriate fees by such corporation, the\nsuperintendent shall cause a copy of its declaration and charter,\ncertified by him, to be filed and recorded in the office of the clerk of\nthe county in which such corporation has its principal office.\n (D) The superintendent may refuse a license to any such corporation if\nhe finds, after notice and hearing, that any of the proposed\nincorporators or directors of such corporation has been convicted of any\ncrime involving fraud, dishonesty, or like moral turpitude, or is\notherwise an untrustworthy person.\n (9) Upon compliance with the foregoing and any other lawful\nprerequisites for the issuance of an insurer's license, the\nsuperintendent may, in accordance with the provisions of section one\nthousand one hundred two of this chapter, grant a license to such\ncorporation to do the kind or kinds of insurance business specified in\nits charter.\n (b) No person shall participate as an incorporator in the organization\nof more than one assessment corporation within a period of five years\nfrom the date of incorporation of the assessment corporation of which he\nwas an incorporator.\n